Key Points:
- U.S. stocks traded mixed ahead of Fed meeting and Nvidia earnings. The Dow Jones fell 0.09%, the S&P 500 slipped 0.04%, and the NASDAQ rose 0.17%.
- Nvidia is expected to report significant earnings growth due to AI demand. Nvidia currently produces the most advanced AI chips available.
- Fed will provide insight into future interest rate decisions. Several Fed officials have cautioned that the central bank needs more confidence.
- Crude oil futures and Brent Crude contract prices fell for the third session on interest rate concerns and inventory build.
U.S. stocks traded in a mixed fashion on Wednesday, with investors ahead of the latest Federal Reserve meeting and key earnings reports from Nvidia. At 12:38 ET, the Dow Jones Industrial Average slipped by 0.09% to 39836.00, and the S&P 500 fell by 0.4% to 5319.40. Conversely, the NASDAQ Composite rose by 0.17% to 18745.31.
The broad-based S&P 500 slightly slipped from its record close on Wednesday, while the tech-heavy NASDAQ Composite continued its upward momentum as investors anticipated earnings from Nvidia (NASDAQ:NVDA). Nvidia is widely regarded as a bellwether for the rapidly growing artificial intelligence (AI) industry and is expected to report exponential growth in earnings driven by the demand for AI technologies. Nvidia currently produces the most advanced AI chips available and has likely benefited from major tech companies accelerating their AI initiatives. This anticipation has prompted investors to further invest in technology stocks.
The Federal Reserve’s minutes will also be released later in Wednesday’s session, following a series of cautious signals from central bank members. During the last meeting, the Fed kept rates steady but warned of persistent inflation. However, it also mentioned the possibility of interest rate cuts later this year, a prospect markets have clung to. Despite this, several Fed officials have cautioned that the central bank needs more confidence before considering trimming rates. They also downplayed speculation of further rate increases. More Fed officials are expected to speak in the coming days, likely influencing market sentiment.
Nvidia’s earnings will be the highlight in the corporate sector, but there are several other quarterly reports to digest. Target (NYSE:TGT) stock fell almost 12% after the retailer missed profit expectations due to weak discretionary spending. In contrast, TJX Companies (NYSE:TJX) rose over 6% following better-than-expected first-quarter results and an improved annual profit forecast. Lululemon Athletica (NASDAQ:LULU) stock dropped over 20% after the athletic apparel retailer announced the departure of Chief Product Officer Sun Choe.
Crude prices fell on Wednesday, marking the third consecutive session of declines due to concerns over U.S. interest rates and an unexpected build in U.S. oil inventories. By 12:36 ET, U.S. crude futures were down 0/78% at $78.07 a barrel, while the Brent contract dropped 0.69% to $82.31 per barrel.
